Families buying inner-city homes find ways around financial barriers

Kansas City Star (MO), 2014-08-05

Aug. 05 --Darryl and Stephanie Answer started volunteering in the Ivanhoe neighborhood a year before they were able to move there.

They represent a growing number of families that want to become homeowners in the inner city, and, like many, they were not able to qualify for a home loan in the area.

Some, though, are finding ways around those obstacles, such as receiving help from friends.

"We knew this is where we wanted to live and invest in the community," said Darryl Answer, who moved to Ivanhoe last fall after working with children through the neighborhood council.

"A friend of a friend helped us purchase this home and move in. Our heart was to be here. Somebody saw that and was willing to help."

Younger families looking to move into the inner city are a new buyers' market that has increased in the last five years, said Michael Duffy , managing attorney of the Legal Aid of Western Missouri's Westside office.

"But many times, people trying to buy an inner-city home can't get a loan and can't afford to pay straight cash," said Duffy, whose office advises potential homeowners. "In the last five years, I've seen more and more young families with modest jobs who don't want to live in the suburbs. It's a shame to not take advantage of this market demand."

The chief issues are that inner-city homes sell for less than a bank's minimum requirement or the individuals trying to buy a home don't have high enough credit scores, Duffy said.

Jim Alderman , a loan officer at North American Savings Bank , said lending for houses in the city isn't appealing for many banks.

"It's less desirable to make that loan when you could loan out much more for a house in the suburbs," Alderman said. "But banks that operate in metropolitan areas should have lending practices that allow people to buy in the area."

North American Savings has a "Good Neighbor" loan program available to low- to moderate-income borrowers or those financing homes in low- to moderate-income areas of the city, Alderman said.

"This is a great program, but there are not many people aware we have options like this out there," he said. "There are a lot of people looking outside of traditional lending institutions."

While some programs exist, lending institutions aren't doing enough to foster buying homes in the urban core, said Coley Williams , a co-founder and president of Credit and Homeowner Empowerment Services Inc.

"I do think banks are still getting their feet about them, but the problem is twofold," said Williams, whose nonprofit provides financial and housing education and counseling. "New regulations make it harder for young, first-time homebuyers to qualify for loans, and larger banks are tighter with their lending in general."

Anwar Jones , who moved his family into the Blue Hills neighborhood in 2010, didn't qualify for a home loan and had to seek alternatives. His family qualified for the Kansas City Dream Home Program, which helps low- to moderate-income buyers purchase houses within the city limits.

"We wanted a place to start our family and wanted to be active in the urban core," Jones said. "We qualified for downpayment assistance from the KC Dream Program. Without that, it would have been very difficult for us to move here."

There is a growing trend of people moving to "pocket areas" of the city, such as Blue Hills , Beacon Hill and other neighborhoods with strong community programing, said Coleman McClain , manager of the Kansas City Dream Home Program.

The program assists 30 to 50 homebuyers a year and is funded by the U.S. Department of Housing and Urban Development . But those funds have diminished over the years, McClain said.

"The demand is there, but the availability of funding is not," McClain said. "With lenders requiring higher credit scores and programs like us having less money to assist people, no wonder it is more difficult to buy a home."

Cliff Pouppirt , the director of planning and development at Blue Hills Community Services, said young homeowners such as the Jones family have brought a new level of energy and involvement to the neighborhood.

"Many young folks are moving in and getting involved with community development. You never used to see that," Pouppirt said. "A lot of our residents are senior citizens who have been here for ages. The institutional knowledge of older residents right next to the new vigor of young folks is an incredible combination to rise this community up."

Lester Bass , a home repair specialist at the Ivanhoe Neighborhood Council , said the more people who move into the neighborhood, the stronger it becomes.

"Homeowners moving in and getting involved have helped this neighborhood start to come back," said Bass, a Kansas City native who moved back to Ivanhoe eight years ago. "There's been a tremendous turnaround."

Lisa Hummel and Neil Rudsill had the cash in 2012 to buy their Ivanhoe home, which is just down the street from the Answers, , but they know not everyone has the same opportunity, and they hope to give someone the same chance to own a "healthy and happy" home.

With the help and support of their families, the couple renovated their house from the ground up, installing radiant floor heating and other energy-efficient upgrades. They then purchased the dilapidated house next door and plan to fix it up similarly for a family that wants to work toward home ownership.

"We fell in love with our house and saw the potential of this space," Hummel said. "Once we learned about the initiatives this neighborhood has been working on, we fell in love with that, too. We believe neighborhoods like this one need good and efficient housing, not just Band-Aids."

Hummel said the pride that comes with home ownership is a vital piece of the redevelopment puzzle in inner-city neighborhoods.

"If we can offer people who are shelling out a large percentage of their income to rent a home contributing to asthma/health costs and high energy bills a safe, healthy, efficient and affordable home, what does that begin to look like?" she said. "Where then could they begin to focus their extra energy? We'd like to hope in return it would be working to offer the same to a neighbor."

To reach Caroline Bauman , call 816-234-4449 or send email to cbauman@kcstar.com .


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